Kraken is looking to replicate Coinbase’s success with the Base blockchain by building its own Ethereum Rollup. Joins Sony, Uniswap, and World in the Optimism “superchain.”
Kraken, one of the largest U.S. cryptocurrency exchanges, is building its own blockchain, the company announced Thursday.
That blockchain, Ink, will be an Ethereum rollup, a blockchain built on top of Ethereum that offers faster and cheaper transactions.
Ink makes Kraken the latest exchange to offer millions of customers a way to do business “on-chain.”
Most people who own and trade cryptocurrencies rarely interact directly with blockchain-based applications. Instead, they let centralized exchanges store and exchange their cryptocurrencies.
The practice is an ironic development for an industry built around technology aimed at cutting out intermediaries such as banks and brokerages.
Long viewed with suspicion by crypto enthusiasts, the centralized exchange has taken a combative stance against U.S. regulators, allowing customers to use their own self-custodial wallets or via blockchain. It has sought to demonstrate its commitment to the principal of cryptocurrencies by helping people access the decentralized world.
With Ink, Kraken follows in the footsteps of Coinbase. The exchange became the first exchange to develop its own Ethereum Rollup when it launched Base in June 2023.
Base has been a huge success. Combined with other “payments-related revenue,” this rollup generated more than $100 million for Coinbase in the first half of this year, amounting to about 3.5% of the exchange’s total revenue, according to the company’s latest quarterly report. It is said to be equivalent. This month, the company’s DeFi ecosystem became the largest in the Ethereum rollup, surpassing longtime leader Arbitrum.
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Like Base, Ink is also built using code from Optimism. Optimism is an early rollup developer, sharing technology with other developers and contributing to ongoing development.
Optimism Chain accounts for almost half of the transactions in Ethereum’s 100+ rollups. Companies developing rollups using the Optimism code include Sony, Uniswap, and Sam Altman-backed Eyescan World (formerly known as WorldCoin).
While the proliferation of rollups fragments Ethereum’s liquidity, Optimism plans to use its own code to introduce a new token standard in 2025 that will enable interoperability between blockchains.
“Ink will support Superchain ERC20 at launch, allowing users to easily move within the Superchain ecosystem and preparing the foundation for more seamless interaction between Ink and other OP chains.” Kraken he said in a statement.
Kraken claims to have over 10 million users worldwide. We plan to release the Ink test network later this year and release the final version on Ethereum in 2025.
Aleks Gilbert is a DeFi correspondent based in New York. Contact him at aleks@dlnews.com.